When trying to get out of debt and save, buying a new car can feel counterproductive. Yet, life throws curveballs, like outgrowing a car or a catastrophic breakdown, that will leave you looking for your next car.
Buying a new car can feel like stepping onto a battlefield. There are prices to haggle over, tactics to navigate, and a lingering fear that you’ll leave the dealership with less money and more regret. Thankfully, you don’t need to be an expert negotiator to secure a great deal.
Car dealerships thrive on negotiations, but they’re not unbeatable. Many buyers underestimate how much power they hold during these conversations. After all, a well-informed buyer is a salesperson’s biggest challenge.
This guide will walk you through some tried-and-tested tips for negotiating a new car (as in new to you, not brand new!).
1. Do Your Homework
Knowledge is power, especially in car negotiations. Research the make and model you’re interested in, including its MSRP (Manufacturer’s Suggested Retail Price), invoice price, and any ongoing promotions. Sites like Kelley Blue Book and Edmunds are great resources for this information.
Having a clear understanding of a car’s value puts you in control of the conversation. When you know what the car is worth, you’ll recognize a fair offer or spot an inflated one immediately.
2. Know Your Budget
It’s easy to get swept up in the excitement of buying a new car, but overspending can lead to long-term regret and ruin your efforts to live debt-free. Determine your budget before stepping foot in a dealership and stick to it. This should include the car’s price, taxes, fees, and insurance costs.
Having a firm budget keeps you grounded during negotiations. Remember, salespeople are skilled at upselling brand-new cars or higher grade models, so knowing your limits ensures you won’t be swayed by fancy extras you don’t need.
3. Get Pre-Approved for Financing
Walking into a dealership with pre-approved financing is like having a secret weapon. It gives you a clear picture of what you can afford and prevents dealers from steering you toward unfavorable loan terms.
Shop around for financing before your visit. Banks, credit unions, and online lenders often offer better rates than dealerships, saving you money in the long run. Alternatively, consider what you can afford in cash or that you could pay off quickly to minimize paid interest.
4. Shop at the Right Time
Timing can make or break a car deal. The end of the month, quarter, or year is typically the best time to buy, as salespeople are eager to meet quotas. Similarly, shopping at the end of the day can work in your favor when dealers are more willing to close a deal quickly.
Avoid peak times like weekends or early in the month. Shopping during quieter periods ensures you’ll have the salesperson’s full attention and potentially better offers.
5. Don’t Reveal Your Bottom Line
One of the golden rules of negotiation is to keep your maximum budget to yourself. Sharing this number too soon gives the dealer the upper hand, allowing them to structure the deal around your limit.
Instead, let the dealer make the first offer. This allows you to counter and negotiate from a position of strength.
6. Separate the Car Price from the Trade-In
If you’re trading in your old car, negotiate its value separately from the new car’s price. Bundling the two can make it harder to assess whether you’re getting a good deal on either.
Research your trade-in’s value beforehand and treat it as a separate transaction. This clarity helps you maximize your trade-ins worthwhile focusing on the new car’s price.
7. Be Willing to Walk Away
The power to walk away is your strongest bargaining tool. If the dealer isn’t meeting your expectations, don’t hesitate to leave. This shows you’re serious about getting a fair deal.
Often, walking away prompts the dealer to reconsider their offer. If they know you’re not desperate, they may return with a better deal to close the sale.
8. Focus on the Total Price, Not Monthly Payments
Dealers often use low monthly payments to distract buyers from the total cost of the car. While a smaller payment may seem appealing, it can lead to extended loan terms and higher overall costs, cutting into your ability to save for a secure financial future.
Always negotiate based on the car’s full price. This approach ensures you’re not paying more than necessary in the long run.
9. Look for Incentives and Rebates
Manufacturers often offer incentives or rebates that can significantly lower the car’s price. These promotions might include cash back, low-interest financing, or special discounts for students, military members, or first-time buyers.
Ask the dealer about any available offers and verify them online. Combining these deals with your negotiation strategy can lead to substantial savings.
10. Take Your Time
Don’t rush the process. Salespeople may try to create a sense of urgency, but taking your time ensures you make informed decisions.
Ask questions, review the numbers carefully, and don’t sign anything until you’re confident in the deal. A little patience can go a long way.
11. Test Drive with Purpose
A test drive is an opportunity to assess the vehicle’s features and condition. Pay attention to how it drives, any unusual noises, and whether all the advertised features work properly.
Use the test drive to gather information that might help you during negotiations. If you notice any issues, you can leverage them to ask for a lower price.
12. Be Polite but Firm
Negotiating doesn’t have to be confrontational. Being respectful and courteous goes a long way in building rapport with the salesperson, which can lead to better deals.
However, don’t mistake politeness for weakness. Stand firm on your expectations and be clear about your needs.
13. Avoid Add-Ons and Extras
Dealers often try to upsell extras like extended warranties, paint protection, or wheel locks. While these might sound appealing, they’re often overpriced and unnecessary.
If you’re interested in additional features, research their costs elsewhere. You’ll likely find better deals outside the dealership.
14. Bring a Friend or Advisor
Having someone with you can provide a second set of eyes and ears. They can help you stay focused, catch details you might miss, and offer moral support.
Choose someone who’s experienced or knowledgeable about cars and isn’t shy to speak up. Their input can be invaluable during negotiations.
15. The Curve Ball: Don’t Buy at a Dealer
While this entire article is about how to get a better price at a car dealership, you can also consider ditching the sales parking lot altogether. People are often nervous about buying used cars from private 3rd parties. But if you want to snag an excellent deal and pay cash to avoid wasting money on interest, it might be a great option.
You can find cars 5 to 10 years old with low mileage that have been well-kept for a steal of a deal. This option works best if you’re comfortable assessing the car’s health or have a mechanic who can give it a look for you.
